Underemployment, Capital Irreversibility and Growth under Trade Unionism

David de la Croix and Omar Licandro ()

No 1994003, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In an unionized OLG model, it is shown that steady-state underutilization of labour and equipment can be due to the combinaison of the following elements : (i) Irreversibility of capital, technology and skill decision, (ii) Firm specific shocks on productivity. The presence of unions is neither sufficient nor necessary for having unemployment. The result of Devereux and Lockwood (1991) that union power affects positively the capital stock in general equilibrium does not always hold under capital irreversibility.

Keywords: unemployment; underutilization; irreversibility; investment; union power (search for similar items in EconPapers)
JEL-codes: D90 (search for similar items in EconPapers)
Pages: 17
Date: 1994-02-01
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1994003

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